Layoffs up 10% with restructuring, more white-collar workers hit

Layoffs up 10% with restructuring, more white-collar workers hit

More workers are being laid off as Singapore's effort to restructure the economy intensifies.

A Ministry of Manpower (MOM) report yesterday showed the number had risen 10 per cent last year from a year ago.

Among those asked to go are a disproportionately high number of professionals, managers, executives and technicians (PMETs).

But economists interviewed do not see any reason to be alarmed by the figures as layoffs remain low on the whole and are part of the restructuring process.

Last year, 11,010 workers lost their jobs, a 10 per cent rise from 9,990 workers the year before.

But as overall employment also went up, this meant 5.8 workers in every 1,000 were affected, up only slightly from 5.5 per 1,000 the year before.

Calling it "a very low number by historical standards", Barclays economist Joey Chew said the labour market remains very tight.

The MOM report said the rise reflects the impact of economic slowdown and restructuring.

It noted that restructuring of business processes for greater efficiency was the top reason for layoffs last year, accounting for 37 per cent. The next most common reason was poor business or business failure not due to recession.

But experts said layoffs were likely to mean only short-term frictional unemployment, as workers move across roles and sectors.

"To a certain extent, it's healthy as it indicates that the labour market is trying to adjust and businesses are trying to refocus their activities," said Credit Suisse economist Michael Wan.

Acting Manpower Minister Tan Chuan-Jin, in a Facebook posting, said some redundancy was natural with restructuring, but added: "It is important to ensure we give necessary support to help affected workers, PMETs and all, to ease over the period of transition till they find a job and get back on their feet again."

Fuelling the rise in layoffs was the service sector, with increases mainly in wholesale and retail trade, financial services, and professional services.

Meanwhile, layoffs fell in construction, reflecting the sector's high activity, and in manufacturing. For the first time since 2004, services took a larger share of layoffs than manufacturing: 57 per cent compared with 37 per cent.

And for the first time in a decade, PMETs formed the most vulnerable group.

Last year, 5,960 PMETs were laid off, or 7.4 out of every 1,000 of these better-qualified workers.

MOM said this might reflect "the growing vulnerability of mid-level white-collar workers due to globalisation and technological innovations".

Experts also pointed to the struggling banking sector. More than one-fifth of the PMET layoffs were in financial services.

But most industry professionals do not expect bank layoffs to keep rising this year, said eFinancialCareers managing director for Asia-Pacific George McFerran.

Although workers are finding it a tad harder to get another job, the re-entry rate is still considered high, said economists.

Of those who lost their jobs in the first nine months of last year, 68 per cent found new ones by end 2012, down from 70 per cent the year before.

janiceh@sph.com.sg


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